As technology has evolved, many commercial due diligence (CDD) approaches have dated. Buyers looking to evaluate a prospective target today must consider a greater range of metrics than ever before, in a context of ever-expanding data availability (and noise), regulatory demands and a dynamic commercial landscape. But many deals are still relying on diligence processes established in a different technological era.
In practice, the CDD offering of many providers has changed little in 20 years, even though today’s connectivity and data lake is unrecognisable from that of the early noughties. In most cases, CDD approaches remain grounded in high-level interviews and management statements, focused on financial projections, commercial and reputational dimensions.
These often fail to probe brand value beyond a superficial level. Modern surveying techniques, data analytics and marketing science mean that far more comprehensive approaches are now possible, particularly with regards to assessing brand equity and marketing spend ROI. In short, CDD approaches are due an overhaul.
A better way
The modern marketing skill set, especially the effective use of customer analytics to mine purchase behaviour, demographics, and feedback for actionable insights, can add huge value when it comes to testing strategic growth assumptions.
At the same time, a rigorous assessment of any target’s brand perception, reputation, and positioning, and how it is evolving with changing customer purchasing criteria is an indispensable part of understanding a target’s strengths and weaknesses.
Our approach to CDD therefore incorporates marketing from the beginning of the process, enabling us to identify growth opportunities for businesses that would otherwise be missed. We use early interviews to refine our focus in large-sample, statistically meaningful quantitative research via B2B or B2C surveys.
Combining these data with those from our multiple databases, we form a granular understanding of brand strength, marketing campaign ROI and effectiveness benchmarked against peers – in addition to robust analysis of other commercial factors.
How can KPMG Strategy help?
The strategy division at KPMG Ireland combines rigorous M&A support pre, during and post-deal, with cutting edge marketing and branding expertise. We are well-positioned to lead buy-side and vendor CDD and have a clear track record of success across the island of Ireland. For example:
We led a Commercial Due Diligence for a UK based private equity firm investing in an Irish whiskey business that wanted to understand the market, competitive landscape and the attractiveness of the Target’s proposition to an affluent customer base.
We leveraged our data analytics tools to understand current brand positioning, social brand strength and differences across channel and types / format of content used, compared the effectiveness of online ad spend and overall sentiment analysis, along with more traditional use of industry interviews to test key management assumptions.
Why KPMG Strategy?
At KPMG, relied upon globally to deliver the most confidential of services to thousands of clients, our approach to CDD is different. Unlike many strategy firms, we believe a comprehensive assessment of any target’s strengths and weaknesses must incorporate its brand strength and marketing strategy, which in turn must be grounded in solid business and market analytics – often which do not already exist for deal-ready scrutiny.
We bring our full suite of business competencies to the task, ensuring that all such work combines creativity with solid analysis. In addition, our wide experience across sectors and thousands of clients gives us an unrivalled bank of experience from which to test assumptions, benchmark performance, and hone strategic thinking. Leveraging KPMG's global stature and renown, we're positioned to help you amplify your brand.
Contact us
If you have any queries on how to build brand trust in your business, please contact Chris or Ananya of our branding & marketing strategy team. We'd be delighted to hear from you.
Christopher Brown
Partner, Head of Strategy
KPMG in Ireland
